Political events were not without their influence in producing this mania. Trade and agriculture had begun to revive in 1823 from the depression they had suffered under during the two preceding years. In the independence of the South American Republics a new world was called into commercial activity, and the British merchant and manufacturer seizing upon it as the proper field for the exercise of his enterprise and the employment of his capital, threw himself upon its distant surface with characteristic confidence and avidity. The region was known to be unexplored, and it was believed to be inexhaustible in its products and resources. Loans to its governments, investments in its mines, and speculative ventures for its markets, were entered into with unparalleled credulity to an enormous extent. All ranks, - the first-class merchant, the retired tradesman, the small trafficker, the petty jobber, - were smitten with the general mania, which waxed hotter and wilder the longer it lasted. Such was the folly of 1824 and 1825. Had there been a prudent superintendence of the currency at this period, some effort would have been made to check and subdue the public paroxysm. But what did the Bank directors? They fed it; they poured oil in the flames: raising their circulation, which was 17,768,840l. in 1823, to 19,705,920l. in 1824, and to 21,060,130l. in 1825.

The upshot is best told briefly. - In September a pressure for discounts became heavy upon the Banks. The foreign exchanges turned perceptibly unfavourable in October; the gold drained rapidly away; and before the middle of December the Bank, which at the beginning of the year had upwards of fourteen millions in gold, had about one million left! It was in December that the panic was at the highest. In that month the Bank of Sir Peter Pole & Co. - an old firm, extensive in its agencies for country Banks, - though largely assisted by the Bank, stopped payment after a desperate struggle which lasted for a week. While this house was in jeopardy, the state of the country was awful; when it failed, that state was one of desperation. Every effort was made to procure gold at any price. The Mint worked night and day; but as fast as sovereigns appeared, they disappeared again. England was within an inch of bankruptcy. The Bank had actually consulted ministers upon the best manner of announcing that they had stopped payment; when one of those happy trifles occurred which are occasionally observed to change the aspect of things without any adequate cause: the fever of the public mind abated, the tide turned, and, strange to say, the run for gold was stopped by the simple production of some old one-pound notes! When the Bank found it most difficult to get from the Mint coin sufficient to meet the sharp demands pouring in on all sides, a clerk happened to recollect that there were in the library some parcels of one-pound notes, which had been signed before the passing of the Act for their withdrawal. It was suggested, as the pressure of the country Banks for gold arose entirely from the holders of their one-pound notes, that, possibly, the public might receive Bank of England one-pound notes in lieu of gold. The idea was communicated officially to the Government, who approved of it. When the panic was at its height, a considerable part of these notes was sent into the country, where they were received with acclamation. At Norwich, as Mr. Richards, the Bank director, stated in his account of this panic to the Commons, committee of 1832, "When the Gurneys showed upon their counter so many feet of these one-pound notes of such a thickness, it was said they stopped the run with them." Whether it was that the storm, having expended its fury, died away of exhaustion, or that the small notes sufficed to stop it; the fact was, that within a week after their appearance the panic vanished.

It is amusing to revert to the very sensible things that were said, and the many wise resolutions that were formed, as soon as the imminence of the peril had subsided. We had been taught a salutary lesson, and would exercise more caution for the future, and grow wise, as even fools are said to do, by experience. The Bank had seen the error of its ways, and was not to relapse into them. Things, it was admitted, had been in an unwholesome state, and had stood much in need of a purification, which at length had been administered, strongly, but still properly. Sound principles were now to be steadily acted upon. There was to be no more trading upon fictitious capital; and the different races of schemers, adventurers, and common swindlers, who throve in periods of redundant currency, like the vermin of a hot summer, upon accommodation paper and false credit, were to be swept away, and never raise their noxious heads again. Out of great evil, in short, the greatest good was to grow; and to such a length did this complacent turn for self-congratulation go, that there were persons found who even ventured to compliment the directors of the Bank of England for having so nobly stood by the country in the hour of danger ! When this language was used in the house, it was admirably observed by Mr. Tier-ney, that unquestionably "the Bank directors, having set their house on fire by their mismanagement had afterwards done all they could to extinguish the flames, in order to prevent themselves being burnt with it." In a word, if there was any dependence to be placed upon the judgment of well-informed men, and any truth in the force of public opinion, we had seen the last of the panics.

Such were the reflections with which we consoled ourselves in 1826 for the misfortunes of that year and the autumn preceding it. We had seen the last of the panics, and the Bank was to be a good Bank for evermore! But what proved to be the fact? The same as of old: in the next ten years there were two panics, - namely, in 1832 and 1836; the latter the more remarkable, as it came quick upon the heels of the elaborate inquiry of 1832, which formed the basis of the new charter granted to the Bank in the following year, and settled the criteria upon which that establishment was so to equalize the currency, and its system of business, as to ensure unbroken order and harmony for the happy ages during which the sun of real prosperity was henceforth to shine upon us.